Dynamic interventions and informational linkages

• 成果类型: Article
• 署名作者: Cong, Lin William; Grenadier, Steven R.; Hu, Yunzhi
• 署名单位: University of Chicago; Stanford University; University of North Carolina; University of North Carolina Chapel Hill
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2019.05.011
• 发表日期: 2020
• 页码: 1-15
• 关键词: COORDINATION FAILURES; Government intervention; information design; Financial crisis; global games; learning

摘要

We model a dynamic economy with strategic complementarity among investors and study how endogenous government interventions mitigate coordination failures. We establish equilibrium existence and uniqueness, and we show that one intervention can affect another through altering the public information structure. A stronger initial intervention helps subsequent interventions through increasing the likelihood of positive news, but also leads to negative conditional updates. Our results suggest optimal policy should emphasize initial interventions when coordination outcomes tend to correlate. Neglecting informational externalities of initial interventions results in over- or under-interventions. Moreover, saving smaller funds disproportionally more can generate greater informational benefits at smaller costs. (C) 2019 Elsevier B.V. All rights reserved.